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A Look at PPL Corporation’s Expected 4Q16 Revenues

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PPL Corporation: Revenues

One of the most internationally diversified US electric utilities, PPL Corporation (PPL) plans to report its 4Q16 and fiscal 2016 financial results on February 1, 2017. According to analysts’ estimates, PPL is expected to report total revenues of ~$2.1 billion for the quarter ended December 31, 2016. It reported total revenues of ~$1.8 billion in 4Q15.

PPL revenues

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Revenue drivers

More than half of PPL’s business comes from its UK operations, while the rest comes from Kentucky and Pennsylvania. Favorable weather in both states may positively impact PPL’s revenues in the fourth quarter.

According to the US EIA’s (Energy Information Administration) Short-Term Energy Outlook for January 2017, the average residential customer will consume 3% more electricity between December 2016 to March 2017 compared to the same period in 2016. This could help utilities’ revenues in the coming quarters.

On the other hand, US residential power prices during the start of 4Q16 were 2.1% lower than in 4Q15, which may negatively affect utilities’ revenues this quarter.

Among the US utilities, PPL, AES Corporation (AES), and Sempra Energy (SRE) have a noticeable presence overseas. However, PPL’s more-than-40% rate base is located in the UK.

Utility giants NextEra Energy (NEE) and Southern Company (SO) are scheduled to report their 4Q16 earnings on January 27 and February 1, 2017, respectively.

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